The semiconductor ETF has climbed 244% from April 2025 lows, forming a steep parabolic curve that extends well beyond long-term moving averages and trend lines.

While AI capital expenditure underpins genuine demand growth, much of the rally’s strength stems from speculative trading in smaller, lower-quality names rather than core fundamental performance.

Current sector valuations already embed consensus earnings forecasts for 2026 through 2028, a setup that historically precedes sharp sell-offs and protracted recovery periods once parabolic moves unwind.